GloucesterTimes.com, Gloucester, MA

January 11, 2013

City gets $3M grant for Fort project

By Marjorie Nesin
Staff Writer

---- — A $3 million grant from MassWorks infrastructure — announced Thursday, two months after the state agency turned down Gloucester’s initial $5 million application — brings the city closer to the level of funding needed to carry out a $7.5 million infrastructure and utility project for the Fort neighborhood while the Beauport Gloucester hotel proposal moves forward.

The state, which shot down Gloucester’s initial request in November, granted the funds to Gloucester on a second review — a second look that Gloucester for which Gloucester is thankful, Mayor Carolyn Kirk said Thursday.

”This project is one of only a few that can serve as a change agent for the local economy,” Kirk said. “A downtown hotel is a key part of the business infrastructure we are putting in place to support the city’s emerging marine science and technology economic sector.”

Gloucester will chip in the remaining $4.5 million for infrastructure repair that would cover sorely needed roadway improvements, a water pump station and utility upgrades along Commercial Street and around the former Birdseye industrial site that now includes a hotel overlay zone and is targeted for the planned hotel. Kirk proposed a financing plan for the city’s portion to city councilors yesterday.

”As we have done so successfully on a number of important projects for the city,” Kirk wrote in a letter to councilors, “we have pulled together a public/private partnership which, when taken together, provides the resources to rebuild the infrastructure which will benefit the businesses along Commercial Street, the residences in Fort Square, and support new growth and economic development for the city.”

The Kirk administration intends to fund the project with a combination of the MassWorks grant, money extended by the Beauport LLC developers advancing the hotel, water and sewer enterprise funds, surplus revenue from the city’s “free cash” account, and money from the city’s general fund.

The administration proposes allocating $1 million of “free cash” from the water and sewer enterprise funds, half to be taken from the water fund and the rest from the sewer fund. The city would also take a loan authorization for another $600,000 from the water and sewer enterprise funds.

”This approach allows the city to pay cash for a portion of the work, and keeps borrowing and the impact on water and sewer rates to the citizens of Gloucester to a minimum,” Kirk wrote.

Kirk is proposing tio the council that the remainder of the cost — pertaining to roadway and other non-sewer and non-water repairs — be drawn from the general fund. That would require about $1.5 million in general fund contributions. The exact contribution would be determined as costs arise with the completion of the hotel project.

”These are infrastructural improvements which are not utility related and therefore not eligible as water or sewer enterprise fund expenses,” Kirk wrote.

Beauport Gloucester LLC, the company formed and owned by New Balance owner Jim Davis and Cruiseport’s Sheree DeLorenzo, is planning to build a 101-room, $29.5 million hotel, and agreed to kick $2 million — $600,000 of which the company has already contributed to help Gloucester cover infrastructure improvement costs.

Though many Fort Square residents have long opposed plans for an incoming hotel, which have been in the works for five years, local politicians Rep. Ann-Margaret Ferrante, D- Gloucester, and Senate Minority Leader Bruce Tarr have also stood behind the hotel project, calling it an important piece in Downtown Gloucester’s revitalization.

“This project will assist the city in revitalizing downtown Gloucester and will be a benefit to our businesses and residents for years to come,” Ferrante said. “I look forward to working with the city to move these economic development projects forward while creating jobs in our community.”

Tarr said the impacts of the award would be “truly transformative” for Gloucester.

“Now the city, our state and the private sector are joined together to rebuild Commercial Street, spur private commercial investment, and create jobs that are urgently needed in our city and in our region,” Tarr said.

Marjorie Nesin can be reached at 978-283-7000, x3451, or at mnesin@gloucestertimes.com.